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Maybe they could, but why would they? Landlords charge rent according to what the market will pay, not what their costs are.
by jurassic 8y ago
Maybe they could, but why would they? Landlords charge rent according to what the market will pay, not what their costs are.
- ianai 8y agoThey would if there was someone else in the market selling closer to cost. But real estate isn’t an efficient market.
- perl4ever 8y agoThat's my argument though - if someone is charging 90% less, why would anyone pay more just because someone else has more expenses.
- loco5niner 8y agoBecause of opportunity cost. They've now invested their efforts and money into a house, and are now reaping the benefits of their investment. They could invest it elsewhere, and charging a renter less money "because charity", doesn't make a lot of sense.
- perl4ever 8y agoYou're not looking at the other side of the coin. Why would a renter pay ten times as much "because charity"? Nobody who has to compete with others gets to set a price based on their costs.
- loco5niner 8y ago> Nobody who has to compete with others gets to set a price based on their costs. Sure they can. They can set whatever price they want. And on the other side of the coin, the available pool of renters can choose to pay that price or not pay that price.
- loco5niner 8y ago> if someone is charging 90% less No one is going to charge 90% less than they are able to (except in charity cases). It goes against human nature.